Compare the Interest earned by $9,000 for eight years at 7% simple interest with interest earned by the same amount for eight years at 7% compounded annuaily Why does a difference occur?A Click the icon to view the interest and annulty table for discrete compounding when i=7% per year.The simple interest earned is $ (Round to the nearest dollar)The compound Interest earned is S . (Round to the nearest dollar.)There is a difference in the amount of interest earned becauseV allows interest from previous vears to earn additional interest, whereasonly considers the original principal.simple interestcompound interestEnter your answer in each of the answer boxes.

Given, Amount =$9000 Term = 8 years Simple Interest Rate = 7% Compound Interest rate =…

The simple interest earned is S (Round to the nearest dollar.) The compound Interest earned is S (Round to the nearest dollar.) There is a difference in the amount of interest earned because V allows interest from prevous years to narn additional interest, whereas only considers the original principal. simple interest

The simple interest earned is S (Round to the nearest dollar.) The compound Interest earned is S (Round to the nearest dollar.) There is a difference in the amount of interest earned because V allows interest from prevous years to narn additional interest, whereas only considers the original principal. simple interest

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

1. compound interest is only the interest you earn on your principal amount. TRUE OR FALSE.
17. Which of the following statements is true? Select one: a. Simple interest relates to future value whereas compound interest relates to present value b. Simple interest pays interest only on a fixed principal amount whereas compound interest also pays interest on interest c. Simple interest relates to present value whereas compound interest relates to future value d. Simple interest applies when an investor receives payments and compound interest applies when an investor makes payments
Statement I: In determining the interest income for the 2nd year of non-interest-bearing notes receivable, the effective interest rate must be multiplied with the carrying amount of the notes receivable of the 1st year. Statement II: Eventually, the amortization of the discount in lump sum notes receivable is always increasing. Group of answer choices Both statements are false Statement I is False; Statement II is True Statement I is True; Statement II is False Both statements are true
The formula for computing interest on a note is: Principal of the notex Annual interest rate x Time expressed in fraction of year. True or False True False
To have a times interest earned of 8. Determine whether A. FinancialB. Nonfinancial
Cc. 174.
1. Given: P (Principal amount = 45,000.00 ? (nominal rate) = 0.02 m (frequency of conversion) = 2 t (term) = 4 Find compound interest.
For each of the following annuities, calculate the present value. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Present Value Annuity Payment $ $ $ $ 1,950 1,265 11,455 29,900 Years 7 9 16 24 Interest Rate 8% 7 9 11
The maturity value of a note receivable is equal to the sum of the face amount of the note O plus the interest O plus nothing else O none of these answers are correct Ominus the interest
Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued $12,000,000 of 5-year, 11% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Ebert Company receiving cash of $11,558,459. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round amounts to the nearest dollar. If an amount box does not require an entry, leave it blank. 2. First semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. 3. Second semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry. leave it blank.
A borrower would pay more total interest on a 10-year loan under an equal principal payment plan than on the same loan amortized under an equal total payment plan. A. True B. False

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS